Thursday, January 9, 2014

Robert Reich: How more wealth is being redistributed to the wealthy in America

Robert Reich, an economist by training, published an editorial about the impact of the widening income inequality on American workers, especially poor and middle-class families. The last thirty years has seen the greatest redistribution of wealth from the poor to the rich (reverse Robin Hood). I wonder how will the late John Rawls (one of the major thinkers in liberal political philosophy) react if he saw how this nation has changed from social welfare for the needy to corporate welfare for the wealthy.

For years, the bargaining power of American workers has also been eroding because of the ever more efficient means of outsourcing abroad, new computer software that can replace almost any routine job, and an ongoing shift of full-time to part-time and contract work. And unions have been hit hard. In the 1950s, more than a third of private-sector workers were members of labor unions. Now, fewer than 7% are unionized.
All this helps explain why corporate profits have been increasing throughout this recovery (they grew more than 18% in 2013 alone) while wages have been dropping. Corporate earnings now represent the largest share of the gross domestic product — and wages the smallest share of GDP — since records have been kept.
Hence, the Great Redistribution.

Check out Reich's documentary on income inequality, Inequality for All (2013).

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